Will Apple Help Save the Newspaper Industry?

A report issued by the Audit Bureau of Circulations showed that The New York Times (NYSE:NYT) saw solid circulation growth for the six-month period ending September 30, 2012.

While the publication has grappled with dwindling demand for print media and advertising, increases in digital subscriptions have helped the paper’s weekday circulation grow by 40 percent. The New York Times’ online readership more than doubled in the past 12 months, with weekday digital subscriptions rising 136 percent to 896,352 and Sunday subscriptions rising 129 percent to 850,816. For the first time in history, digital subscriptions surpassed print.

Research done by the Pew Research Center for the People and the Press showed that established media brands, including the New York Times and Time Warner’s (NYSE:TWX) CNN, benefit more from mobile devices than do web native sources. According to the study, which incorporated data from 1991 through 2012, the number of readers accessing established media sources using tablets, like Apple’s (NASDAQ:AAPL) iPad, has increased by 56 percent. Comparatively, the number of readers using smartphones has increased 52 percent and the number of readers using computers has risen 39 percent.

But these statistics do not mean that the 161-year-old-publication has made the digital transition successfully. Even though the paper’s total circulation rose over the past few months, advertising revenue did not. Print advertising still sells at a premium compared to online ads, and the print circulation for the New York Times decreased 6.9 percent for weekdays and 1.8 percent for Sundays. Following the Times’ third quarter earnings report, which revealed that the paper’s advertising revenue fell by 8.9 percent, the company’s stock dropped 21 percent, its biggest single day drop since 1980.

The New York Times was not the only paper to see its circulation rise. According to the Audit Bureau’s report, NewsCorp’s (NASDAQ:NWS) Wall Street Journal remains the largest circulating weekday paper, after increasing its readership by 9.4 percent. USA Today, owned by Gannett (NYSE:GCI), ranked second, even though its circulation dropped 3.9 percent to 1.71 million readers. The New York Times was third.